Cingular to give away 18 months of iPhone service? | iLounge News

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Cingular to give away 18 months of iPhone service?

AT&T/Cingular plan to aggressively push Apple’s iPhone to new customers, offering them 18 months of free service, according to Jim Cramer, director and co-founder of investment site TheStreet.com. “The company made it very clear that it’s going to use Apple’s iPhone to get customers from Verizon Wireless by giving away its service for a year and a half to those customers who buy the phone,” Cramer said after speaking with executives from AT&T/Cingular.

“Management sounded like kids when talking about the iPhone and how it was going to remake AT&T and that it was the greatest invention they’ve ever seen,” Cramer said in a related article. “Now, AT&T’s all about market share, and if you read between the lines, I think you see a strategy coming where the device’s $500 price point is preserved but the service contract is greatly reduced. I think that AT&T—and not Apple—is the key to this next leg, and CEO Stan Sigman can make it happen.”

Update: According to a Cingular representative, the company will not be offering a free period of service with the iPhone. “The report is nonsense,” the spokesperson said. “We’ve always said the only way you can get the iPhone is with a Cingular rate plan.”

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Comments

1

The article doesn’t mention anything about 18 months of service. Where did you get 18 months from?

Posted by bob on January 25, 2007 at 2:35 PM (CST)

2

hmmmmm…. I still don’t think I’ll be switching from verizon anytime soon….
I still don’t understand why apple would only go with cingular.  I mean verizon already has a wireless broadband service in place.  It just seems to me Apple would sell a lot more cell phones by openning it up to all the other service providers.
I just don’t get it???

Posted by 3rdEye on January 25, 2007 at 2:39 PM (CST)

3

[url=http://www.thestreet.com/_mktw/funds/realmoneyradiowrap/10334546.html]First link[/url

Cramer said AT&T (T - news - Cramer’s Take) is one of the most interesting stories coming out of the tech period. In its call, the company made it very clear that it’s going to use Apple’s (AAPL - news - Cramer’s Take) iPhone to get customers from Verizon Wireless (VZ - news - Cramer’s Take) by giving away its service for a year and a half to those customers who buy the phone.

Posted by Audrey McGirt on January 25, 2007 at 2:50 PM (CST)

4

Where did you get 18 months from?

From the first link (thestreet.com), last paragraph of the first page:

“Cramer said AT&T is one of the most interesting stories coming out of the tech period. In its call, the company made it very clear that it’s going to use Apple’s iPhone to get customers from Verizon Wireless by giving away its service for a year and a half to those customers who buy the phone.”

Posted by flatline response on January 25, 2007 at 2:53 PM (CST)

5

That just might convince me to finally break away from Verizon. If I can get over the sticker shock, anyway.

Posted by Cad on January 25, 2007 at 3:15 PM (CST)

6

I have been really happy with Verizon, plus most of my friends use Verizon as well, but the moment I saw the iPhone I knew I’d be switching. This would be icing on the cake. COOL!

Posted by urbanslaughter on January 25, 2007 at 3:19 PM (CST)

7

I’d have NOT hesitation to switch if I got 18 months of service included in the $500 price tag.

Posted by iScott on January 25, 2007 at 3:20 PM (CST)

8

Why AT&T?

Here’s my take - apple wanted to create one model of the phone that would work the world over, as well as offer consistent levels of service. This automatically rules out Verizon and Sprint here in the US, leaving both T-Mobile and AT&T. I can only imagine that a T-Mo deal would’ve required that Apple use them as a world-wide carrier (they have operations in like 100 countries).

AT&T is the second-largest carrier in the US, and supports GSM/GPRS/EDGE, etc. So they were a logical choice.

In addition- they picked EDGE and not HPDSA(sp?) or UMTS, because they wanted to keep production costs down and user experience consistent.

Let’s see - if my Cingular Bill is $40/mo, 18 months would be approximately $620. Enough to put $20 in my pocket after getting the 8GB iPhone.

Posted by Yonah Wolf on January 25, 2007 at 3:47 PM (CST)

9

If they’re giving 18 months of the 24 month contract away for free then I’ll buy one and carry it along with my Verizon Treo 700p.  I’m locked into a Verizon contract, and the iPhone won’t have all the features I want (which the Treo does) for a few years at least, but that is such a smokin’ deal it’d be worth it just to use it as an iPod!  Verizon service here in Milwaukee spanks Cingular/AT&T’s service, which is another reason I won’t leave behind my Verizon phone.

Posted by Cool Cat on January 25, 2007 at 3:58 PM (CST)

10

18 months of service would just about be the same equivalent price as the iPhone.

$30 x 18 months = $540

I’d switch from Verizon in a hot second. No brainer!

Posted by Kevin Crossman on January 25, 2007 at 4:31 PM (CST)

11

<< Let’s see - if my Cingular Bill is $40/mo, 18 months would be approximately $620. Enough to put $20 in my pocket after getting the 8GB iPhone. >>

You’re forgetting about cancellation fees. They’re usually about $150.

Posted by DevonS31 in Westfield, NJ on January 25, 2007 at 4:34 PM (CST)

12

what will this “free” service include, though?  is the service going to be voice, data, or both?  i would be happy even if it only included the unlimited data plan, but what if it doesn’t?  what if the service they are referring to is a lower data plan?

also, what happens to us loyal cingular customers?  i already did switch from verizon 2 years ago because i hated the service i was getting.  i even went so far as to switch in the middle of a contract with verizon.  will that buy us any brownie points towards this bonus?

Posted by fogues on January 25, 2007 at 4:43 PM (CST)

13

You can be sure it will be loaded with caveats and fine print. It’s clever marketing cuz if you said “phone FREE! with 2 year contract” it’s yawn, but “18 months FREE! service” leaves so much more to the imagination.
(fine print: free “service” defined as a 100 min/month plan, additional plans available at rip-off cost minus $30/m credit cuz we love you soooo much)

AT&T was the worst wireless provider back in the day, thus the momentum behind the Cingular rebrand. So now they want to be AT&T again, ha!

Posted by Ken Hamel on January 25, 2007 at 6:33 PM (CST)

14

Wow this would be great and is a genius idea of AT&T or Cingular or whoever they are now.

I also wonder whether the 18 months free would include unlimited data and voice or just one or the other or a wimpy plan?

Also if you have to sign a 2 year contract, is the 18 months free service included in the 2 year contract? 

I imagine in 2 years Apple will have an updated version of the iPhone and then Cingular has you already hooked, they are smart.

I’m hoping that Apple decides to add the 3G HDSPA (?) to the iPhone by June. 

It’s in most big cities I don’t know why it would hurt Steve to offer 2 versions one with EDGE and one with 3G (buy whichever one works better coverage wise for you).

This 18 month deal and 3G data would make me sign up ASAP.

Posted by Ethan on January 25, 2007 at 6:34 PM (CST)

15

This makes total sense to me.  This is the Apple marketing model.  Consider the iTunes pricing strategy.  $.99 per song makes Apple a little bit of extra change, but it’s not a core business.  It’s been said many times, the iTunes pricing structure is more about selling iPods, than selling music.  This will be the same scenario for the iPhone.  The $$$ will be made selling the iPhone (for both Apple and AT&T), not the monthly service.

Posted by P-D on January 25, 2007 at 6:55 PM (CST)

16

“AT&T was the worst wireless provider back in the day, thus the momentum behind the Cingular rebrand. So now they want to be AT&T again, ha!”

Even if the first part is true, that probably had very little to do with the rebrand. Cingular bought AT&T wireless, hence the rename of Cingular. But, in March of 06, AT&T bought out Bellsouth, owner of Cingular and also formerly of AT&T pre-division, and thus, Cingular will know be the new AT&T (or at&t, whatever the hell they’re calling it now).

I’m sure this plan hopes that it will attract customers that will stay past the 2 year contract. Knowing Cingular/AT&T, they’re probably going to be charging $60+ a month for voice and data, which means they’ll probably be losing some money.

Posted by Nobody on January 25, 2007 at 10:22 PM (CST)

17

I think that 18 months of free service would certainly entice many people to make the switch to AT&T that were on the fence about purchasing an iPhone and changing networks.  However, I also believe AT&T offering to “buy out” your current contract (paying your early termination fee) would work just as well.  Sprint just finally got me to switch to their network after 4 years with Verizon because they made the switch quick, painless, and monetarily worth it.  They paid my termination fee, gave me a nice phone for not a lot of money, 7pm nights instead of 9pm nights, and a Visa gift card to use how I wish.  I would never had considered it if they didn’t give me the $175 I owed Verizon.  Maybe AT&T could make it this simple.

Posted by mc123 on January 26, 2007 at 8:31 AM (CST)

18

Yeah, I was trying to tell someone about the discount last night when I realized, “wait, this doesn’t make any sense.” Cingular/AT&T already has the largest market share. Why would they be so concerned about increasing it? I guess that should have raised a few red flags. Oh well, I’ll still be switching :(

Posted by urbanslaughter on January 26, 2007 at 11:00 AM (CST)

19

the rumor has been partially debunked.  theres not going to be free service.  people that believed that was going to happen were idiots.  but there may be some truth in the rumor.  the phone is not subsidized by cingular/att and they’re (apple and att) charging a price for the iphone, that some have speculated as being some where between 40-50% profit.  so lets say they would have subsidized $250 with a 2 year agreement and that the iphone is making $100 more profit per unit then the typical cell phone manufacturer. thats a $350 premium for i iphone over a competing smartphone with a 2 yr. agreement.  if you divide that by 18 months, thats roughly 20 dollars. 20 dollars sounds about right for a basic data and email plan.  you would still have to get a rate plan, just like the ATT rep who debunked the rumor said, but the data and email would be virtually free.  to the people that ask why ATT would do such a thing, since it cuts away from their profits, all i have to say is APPLE. apple has invested interest in this plan for two reasons, a. they need the iphone to be expensive to not undercut their regular ipods which sell for the 300-400 mark and b. they want the data aspect of the iphone to be easy and unburdensom to the consumer. we’ve heard how its taken forever for apple to negotiate with the cell providers , why would it have taken negotiations at all unless there was something special going on with the pricing structure of the iphone?

Posted by christ on January 26, 2007 at 8:11 PM (CST)

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